API Banking Market Size to Reach USD 197.39 Billion in 2032
The API banking market size was USD 31.73 Billion in 2024 and is expected to register a revenue CAGR of 25.8% during the forecast period
January 18th, 2025 – Rising deployment in application programming interfaces (API) in digital payments is a major factor driving the market revenue growth of API Banking Market. Banking and non-banking financial institutions are rapidly deploying API gateways to secure account management and transaction processes.
Consumer adoption of FinTech applications for making securing transactions are fueling market revenue expansion. Payment aggregator platforms are integrating APIs to provide customer-centric digital payment solutions. According to the World Economic Forum (WEF), a survey of 227 companies worldwide revealed that 51% identified strong consumer demand for their services as the primary driver of growth.
Rapid 5G deployments across countries are expected to propel the demand for API integration in open banking platforms, which is expected to support market revenue expansion over the forecast period. According to the World Economic Forum (WEF), a survey of 227 companies worldwide revealed that 51% identified strong consumer demand for their services as the primary driver of growth.
The rising adoption of open banking is developing as a prominent market trend in the API banking space. The European Union (EU) has successfully adopted Open Banking, commonly known as the Payment Services Directive (PSD2). Regulatory agencies in some countries have finalized open banking rules, which will promote innovation and competition in banking, financial services and insurance (BFSI).
For instance, in October 2024, the Consumer Financial Protection Bureau (CFPB) finalized a regulation on personal financial data rights. This new rule will accelerate the implementation of open banking in the United States by minimizing BFSI lock-in.
However, rising concerns regarding data privacy and security are major factors that are expected to restrain the market revenue growth. The risk of API breaches can lead to data loss, which can lead to financial losses and which could also damage the reputation of a company. According to a report by the U.S. Federal Trade Commission (FTC), individuals reported losing more than USD 10 billion to fraud in 2023, an increase of more than USD 1 billion from the previous year. Over USD 4 billion in losses have been attributed to investment-related frauds.
Key Highlights:
- Solutions segment contributed largest market revenue share in 2024. The rise in integration of direct-to-bank APIs contributed to revenue share growth. Banking, financial services, and insurance (BFSI) and FinTech organizations are increasingly using APIs for real-time access balances, transaction tracking, and biometric payment processing. New offerings in corporate banking APIs have accelerated API Banking’s market forces.
- Cloud based segment is expected to register fastest revenue growth over the forecasted period. Banks and financial institutions are modernizing their outdated systems by using cloud-based APIs for corporate banking, large enterprises, small and medium businesses (SMBs), and retail clients. This build-and-migrate method will assist BFSI organizations in progressively transitioning their existing client bases to the new banking systems.
- Financial services segment contributed a significant revenue share in 2024. Banks are rapidly developing and integrating APIs for digital transactions and cash management. As a result, to meet expanding demand in financial institutions, several major businesses are developing product-market fit (PMF) solutions, which are helping to expand marketing revenue share in this market.
- Europe contributed a substantial revenue share in 2024. The Revised Payment Services Directive (PSD2) was introduced to enable banks with API access to third-party providers (TPPs), hence enabling market revenue growth in Europe. In July 2024, the European Union (EU) Commission issued a new proposal for the Revised Payment Services Directive (PSD3) to modernize the present payment services framework by boosting consumer protection and improving access to open banking. The implementation of new laws is likely to drive considerable development in Europe’s API banking market.
- Some major companies in the API banking market report include Plaid Inc., Stripe, Inc., TrueLayer Ltd., Oracle Corporation, Infosys Limited, Finicity, Yodlee, Inc., Mambu, Yapily Ltd., FidyPay, MX Technologies Inc., Brankas, Trovata, Inc., Temenos Headquarters SA, VoPay International Inc, and Wells Fargo & Company.
- On 8th October 2024, Erste Group in Austria partnered with Salt Edge to enhance multi-banking services across Central and Eastern Europe (CEE). Erste enables users of its retail banking app, George, to connect third-party bank accounts from Romania and Austria seamlessly. The API facilitates both account information and payment initiation services, connecting corporate clients to 71 banks across the Central and Eastern Europe (CEE) region.
Unlock the key to transforming your business strategy with our API Banking Market insights –
Navistrat Analytics has segmented API Banking market in the areas of component, deployment model, end-use, and region:
- Component Outlook (Revenue, USD Billion; 2022-2032)
- Solution
- Account Management
- Payment Process
- Open Banking
- Credit Scoring
- Fraud Detection
- Others
- Service
- Consulting
- Implementation and Integration
- Support and Maintenance
- Managed Services
- Solution
- Deployment Model Outlook (Revenue, USD Billion; 2022-2032)
- On-premise
- Cloud
- Public Cloud
- Private Cloud
- Hybrid Cloud
- End-Use Outlook (Revenue, USD Billion; 2022-2032)
- Financial Institutions
- Commercial Banks
- Central bank
- Investment Banks
- Non-Banking Financial Institutions (NBFIs)
- Insurance Companies
- Microfinance
- Brokerage and Wealth Management
- Others
- Fintech
- E-commerce
- Healthcare
- Retail and hypermarket
- Others
- Financial Institutions
- Regional Outlook (Revenue, USD Billion; 2022-2032)
- North America
- U.S.
- Canada
- Mexico
- Europe
- Germany
- France
- U.K.
- Italy
- Spain
- Benelux
- Nordic Countries
- Rest of Europe
- Asia Pacific
- China
- India
- Japan
- South Korea
- Singapore
- Oceania
- ASEAN Countries
- Rest of APAC
- Latin America
- Brazil
- Rest of LATAM
- Middle East & Africa
- GCC Countries
- South Africa
- Israel
- Turkey
- Rest of MEA
- North America